Study On The Legal Issues Of The "No Liability,No Compensation" Clause Of The Automobile Insurance

Under normal conditions, the vehicle will pay three kinds of insurances: the compulsory vehicle insurance of traffic accident, third-party liability insurance and the motor vehicle loss insurance. The compulsory vehicle insurance of traffic accident is compulsory by law to purchase a motor vehicle insurance, and its main role is to provide basic protection and support as far as possible for damaged vehicles and the accident victims. The principle of the compulsory vehicle insurance of traffic accident is “no-fault principle”, which means when accident occurred, once it falls within the compensation range of the compulsory vehicle insurance, the insurance company should compensate the victims and property damage under the “compensation without liability” system even the insurance company is no liable. Besides, the main voluntary insurances the vehicle owner purchases are the commercial third-party liability insurance and the motor vehicle loss insurance. The former is used to cover the damage compensation paid by the insurant to third parties in both accidents, and the latter is used to compensate the insured vehicle itself. Generally these two insurances can cover the damage in ordinary accidents. But at the same time, these two insurances have different function in spite of they are both commercial insurance.Actually, these two voluntary insurance contracts both have “no liability no compensation” clause”, that is the insurance company will not be liable for damage if the insured vehicle is not responsible for the accident. Under this term, there will be a condition that the insured vehicle doesn't get any compensation and becomes the biggest victim of the accident, when the others takes full responsibility in a traffic accident.This paper selects the “no liability no compensation” case heard by Deyang City Court, Sichuan Province, in which the court under the Article 19 of the “People's Republic of China Insurance Law”, decided the “no liability no compensation” clause was invalid for this form term eliminated the insurer's obligations and increased the insurant's responsibility. By introducing the basic situation of the case and the summary of the judgment, the author points out three contentions: first, the nature of the no liability no compensation clause, which is if it is a disclaimer; second, the validity of the clause, which is if the clause is valid; third, how about the relationship between the clause and right of insurance subrogation and how to perfect the system of the right of insurance subrogation.The paper is divided into four sections after the introduction. Section one leads the no liability no compensation clause by the case, and points out the contentions of the case under the court's decision on the validity of the clause. According to the contentions, section two focuses on the nature of the clause and concludes that this clause is a disclaimer clause in auto insurance contract. Section three puts forward to the questions to the case and respectively discusses the validity of the clause in commercial third-party liability insurance and motor vehicle loss insurance, and concludes the validity of the clause is varied in different insurances. At last section, the insurance claim disputes on no liability no compensation clause reflects the deletion of the system of the right of insurance subrogation, and the author analyzes the reasons and provides the perfect proposals.